What changed in this filing

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Item 1. Business

2023-03-17 compared with 2022-05-20 · 111 added, 118 removed, 213 unchanged (52% of the section changed)

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The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.

Change in Fiscal Year End

On February 4, 2021, the Board of Directors of the Company approved changing the Company’s fiscal year from a fiscal year ending on March 31 of each year to a fiscal year ending on December 31 of each year.

As a result of this change, all 2020 data is for the nine-month transition period from April 1, 2020, to December 31, 2020.

The Company’s fiscal year 2021 commenced on January 1, 2021.

2022 - Late Filings and Restatements

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The Company recorded such sales as “permanent equity” and the SEC Comment Letter suggested the appropriate accounting classification was something other than permanent equity given certain provisions within the Certificate of Designation for the Series C Stock (“COD”).

The Company had discussions with its accounting advisors and the SEC staff regarding the accounting treatment for the Series C Shares.

The Series C Shares have been outstanding since 2016 and the accounting treatment is applicable to all of the Company’s previously filed and yet to be filed financial statements.

On September 16, 2021 the Company filed an 8-K, Item 4.02 non-reliance on previously filed financial statements and deferred filing Annual Reports on Form 10-K and quarterly reports on Form 10-Q until the appropriate accounting treatment had been determined.

In November 2021, the Company believed it had determined the appropriate accounting treatment and filed an amended Annual Report on Form 10-K/A for the year ended March 31, 2020, inclusive of restated comparative financial statements for the year ended March 31, 2019, an amended Quarterly report on Form 10-Q/A for the three months ended June 30, 2020, and an amended quarterly report on Form 10-Q/A for the three- and six-month periods ended September 30, 2020.

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On March 28, 2022 the Company filed Form 8-K, Item 4.02 non-reliance on previously filed financial statements

After numerous consultations with the SEC staff and the Company’s accounting advisors, in May 2022, the Company has now concluded on the proper accounting treatment and is bringing all financial statement filings current.

Camber, a Nevada corporation, is based in Houston, Texas.

We are currently primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations in Kansas, Louisiana and Texas, and hold interests in non-producing wells in Mississippi.

After numerous consultations with the SEC staff and the Company’s accounting advisors, in May 2022, the Company concluded on the proper accounting treatment and filed all financial statements then outstanding to bring the Company current with its filing requirements at such time.

Camber is based in Houston, Texas.

Incorporated in Nevada in December 2003 under the name Panorama Investments Corp., the Company changed its name to Lucas Energy, Inc., effective June 9, 2006, and effective January 4, 2017, the Company changed its name to Camber Energy, Inc.

With the acquisition of a majority interest in Viking Energy Group, Inc.

described herein, the Company’s business plan is to acquire a majority interest in assets or entities in the energy sector, including engaging in the acquisition, exploration, development and production of oil and natural gas properties, both individually and through collaborative partnerships with other companies in this field of endeavor.

Camber’s aim is to become a growth-oriented diversified energy company.

The Company owns minority, non-operated working interests in certain oil & gas wells in Texas, and through its investment in Viking Energy Group, Inc.

(“Viking”), the organization provides custom energy & power solutions to commercial and industrial clients in North America.

Viking also holds an exclusive license in Canada to a patented carbon-capture system, and has a majority interest in:

(i) an entity with intellectual property rights to a fully developed, patented, proprietary Medical & Bio-Hazard Waste Treatment system using Ozone Technology;

and (ii) entities with the intellectual property rights to fully developed, patent pending, proprietary Electric Transmission and Distribution Open Conductor Detection Systems.

The Company is also exploring other renewable energy-related opportunities and/or technologies.

On December 16, 2022, the Company filed a Certificate of Change with the State of Nevada to effect a reverse split of our common stock at a ratio of 1-for-50.

As a result of the reverse stock split, each fifty (50) pre-split shares of common stock outstanding were combined into one (1) new share of common stock.

Unless otherwise stated, all share and per share numbers in this Annual Report on Form 10-K and included in the consolidated financial statements have been adjusted to reflect the reverse stock split.

Vikin g Investment

On December 23, 2020, Camber entered into a Securities Purchase Agreement (the “ Purchase Agreement ”) with Viking Energy Group, Inc.

(“Viking”) to acquire (the “ Viking Acquisition ” or the “ Acquisition ”) 26,274,510 shares of Viking’s common stock, constituting 51% of the issued common stock of Viking (the “ Initial Viking Shares ”), in consideration of (i) the payment of $10,900,000 in cash by Camber to Viking, which was retained by Viking (the “ Cash Purchase Price ”), and (ii) Camber canceling $9,200,000 in promissory notes previously issued to Camber by Viking (the February 3, 2020 promissory note for $5,000,000 and the June 25, 2020 promissory note for $4,200,000, collectively the “ Viking Notes ”) along with accrued interest.

On December 23, 2020, Camber entered into a Securities Purchase Agreement (the “ Purchase Agreement ”) with Viking to acquire (the “ Viking Acquisition ” or the “ Acquisition ”) 26,274,510 shares of Viking’s common stock, constituting 51% of the issued common stock of Viking (the “ Initial Viking Shares ”), in consideration of (i) the payment of $10,900,000 in cash by Camber to Viking, which was retained by Viking (the “ Cash Purchase Price ”), and (ii) Camber canceling $9,200,000 in promissory notes previously issued to Camber by Viking (the February 3, 2020 promissory note for $5,000,000 and the June 25, 2020 promissory note for $4,200,000, collectively the “ Viking Notes ”) along with accrued interest.

Pursuant to the Purchase Agreement, Viking is generally obligated (subject to certain limitations) to issue additional shares of Viking common stock to Camber to ensure that Camber shall own at least 51% of the common stock of Viking through July 1, 2022.

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Rather, the Company accounts for its investment in Viking under the equity method.

Merger Agreement with Viking Energy Group, Inc.

Merger Agreement with Viking

On February 15, 2021, Camber entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Viking.

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The Merger Agreement provides, among other things, that effective as of the Effective Time, James A.

Doris, the current Chief Executive Officer of both Viking and Camber, shall serve as President and Chief Executive Officer of the Combined Company following the Effective Time.

Doris, the current Chief Executive Officer of both Viking and Camber, shall serve as President and Chief Executive Officer of the resulting merged entity (the “Combined Company”) following the Effective Time.

The Merger Agreement provides that, as of the Effective Time, the Combined Company will have its headquarters in Houston, Texas.

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The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 .

The Merger has not been completed.

As of the date of filing this report, neither Viking or Camber has advised of its intention to terminate the Merger Agreement.

As of March 17, 2023, neither the Company nor Viking had advised of its intention to terminate the Merger Agreement.

However, given the lapse of time since the date of the Merger Agreement, the Company believes it is reasonably likely that certain terms would need to be modified by the parties in order for the parties to proceed with the Merger.

On or about March 14, 2023, the Company’s Board of Directors resolved to enter into negotiations with Viking to modify certain terms of the Merger and to re-engage a valuation firm in connection with securing a fairness opinion or any other valuation report, analyses or presentations that might be necessary or appropriate regarding the Merger.

As of March 17, 2023, the Company had not determined the revised terms upon which it would be prepared to proceed with the Merger.

Any modifications to the terms and conditions of the Merger Agreement would be subject to the written agreement of both the Company and Viking, and there is no assurance that the Company and Viking will agree on any such proposed modifications.

Moreover, the satisfaction of conditions, whether existing or new, may be outside of the Company’s control.

Lineal Acquisition and Divestiture:

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In connection therewith, the Company redeemed the Company’s Series E and F Preferred Stock issued in connection with the Lineal Merger and ownership of 100% of Lineal was transferred back to the Preferred Holders, and all of the Series E Preferred Stock and Series F Preferred Stock of the Company outstanding were cancelled through the redemption.

N&B Production Payment

The Company sold a significant portion of its oil and gas production assets in Oklahoma to N&B Energy, LLC (“ N&B Ener gy”) effective August 1, 2018.

As part of the sale of its assets to N&B Energy, the Company also retained a 12.5% production payment (effective until a total of $2.5 million has been received) and a 3% overriding royalty interest, in its then existing Okfuskee County, Oklahoma assets;

and an overriding royalty interest on certain other undeveloped leasehold interests, pursuant to an Assignment of Production Payment and Assignments of Overriding Royalty Interests.

No payments were received in regard to any of the retained items noted above through December 31, 2020, and the filing date hereof.

Camber retained its assets in Glasscock County and operated wells in Hutchinson County, Texas, following the N&B Energy transaction until completion of the Settlement Agreement discussed below.

On January 31, 2020, the Company entered into a Compromise Settlement Agreement (the “ Settlement A g reement ”) with PetroGlobe Energy Holdings, LLC (“ PetroGlobe ”), Signal Drilling, LLC (“ Si g nal ”), Petrolia Oil, LLC (“ Petrolia ”), Prairie Gas Company of Oklahoma, LLC (“ PGCO ”), and Canadian River Trading Company, LLC (“ CRTC ”).

Pursuant to the Settlement Agreement, the Company agreed to pay PetroGlobe $250,000, of which $100,000 was due upon execution of the Settlement Agreement, which payment has been made, and $150,000 was paid to an escrow account, which was released by the Company upon the successful transfer of all wells and partnership interests of the Company’s prior wholly-owned subsidiary C E Energy LLC (“ CE ”) to PetroGlobe, which was completed on July 16, 2020.

Apache Corporation Settlement

In December 2018, Apache Corporation (“ Apache ”) sued Camber, Sezar Energy, L.P., and Texokcan Energy Management Inc., in the 129th Judicial District Court of Harris County, Texas (Cause 2018-89515).

Apache alleged causes of action for Breach of Contract, Money Had & Received and Conversion, relating to amounts Apache alleged it was owed under a joint operating agreement.

On July 13, 2020, Apache filed a Second Amended Petition against Camber, Sezar, Texokcan, N&B Energy, LLC, and Richard N.

Azar, II alleging Breach of Contract, Defaults under a Joint Operating Agreement, Money Had & Received and Conversion, relating to amounts Apache allegedly overpaid Sezar and Azar and Unjust Enrichment.

On October 26, 2020, the Company entered into an agreement with Apache to obtain a release of all liability (both parties provided mutual releases) for $20,000 which the Company paid in October 2020, which is included in general and administrative expenses on the statement of operations for the nine months ended December 31, 2020.

The litigation was dismissed against the Company.

Preferred Stock Financing Transactions:

On and effective June 22, 2020, the Company and an institutional investor, Discover Growth Fund, LLC ( “ Discover ”) entered into a Stock Purchase Agreement (the “ June 2020 Purchase A g reement ”), pursuant to which Discover purchased 630 shares of the Company’s Series C Redeemable Convertible Preferred Stock (the “ Series C Preferred Stock ”) for $6 million, at a 5% original issue discount to the $10,000 face value of such preferred stock (the “ Face Value ”).

Pursuant to the June 2020 Purchase Agreement, as long as Discover holds any shares of Series C Preferred Stock, the Company agreed that, except as contemplated in connection with the Merger, the Company would not issue or enter into or amend an agreement pursuant to which the Company may issue any shares of common stock, other than (a) for restricted securities with no registration rights, (b) in connection with a strategic acquisition, (c) in an underwritten public offering, or (d) at a fixed price.

The Company also agreed that it would not issue or amend any debt or equity securities convertible into, exchangeable or exercisable for, or including the right to receive, shares of common stock (i) at a conversion price, exercise price or exchange rate or other price that is based upon or varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of the security or (ii) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of the security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common stock.

The Company also agreed to provide Discover a right of first offer to match any offer for financing the Company receives from any person while the shares of Series C Preferred Stock sold pursuant to the June 2020 Purchase Agreement are outstanding, except for debt financings not convertible into common stock, which are excluded from such right to match.

The Company agreed that if it issues any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Discover, then the Company would notify Discover of such additional or more favorable term and such term, at Discover’s option, may become a part of the transaction documents with Discover.

Finally, the Company agreed to include proposals relating to the approval of the June 2020 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the June 2020 Purchase Agreement, as well as an increase in authorized common stock to fulfill the Company’s obligations to issue such shares, at the meeting held to approve the merger pursuant to the original planned merger agreement entered into with Viking in February 2020 (“ First Merger Agreement ”) or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to December 31, 2020.

On and effective June 22, 2020, the Company and Discover Growth Fund, LLC ( “ Discover ”) entered into a Stock Purchase Agreement (the “ June 2020 Purchase A g reement ”), pursuant to which Discover purchased 630 shares of the Company’s Series C Redeemable Convertible Preferred Stock (the “ Series C Preferred Stock ”) for $6 million, at a 5% original issue discount to the $10,000 face value of such preferred stock (the “ Face Value ”).

The Company loaned $4.2 million of the funds provided by the June 2020 Purchase Agreement to Viking in connection with the purchase of the June 2020 Secured Note.

Also on June 22, 2020, the Company and Discover entered into an Amendment to Stock Purchase Agreement (the “ SPA Amendment ”), pursuant to which the Investor agreed to terminate the obligation set forth in the Stock Purchase Agreement previously entered into between the Company and the Investor on February 3, 2020, which contained a Repurchase Requirement substantially similar to the one contained in the June 2020 Purchase Agreement, as to the 525 shares of Series C Preferred Stock sold to Discover on February 3, 2020, which would have required that the Company pay Discover an aggregate of $5,775,000 in connection with the redemption of the 525 shares of Series C Preferred Stock the Company sold to Discover in the event the First Merger Agreement was terminated.

Effective as of July 9, 2021, the Company and another institutional investor, Antilles Family Office, LLC, an affiliate of Discover ( “ Antilles ”), entered into a Stock Purchase Agreement (the “ July 2021 Purchase Agreement ”).

Under the terms of the July 2021 Purchase Agreement, Antilles purchased 1,575 shares of Series C Preferred Stock for $15 million, at a 5% original issue discount to the $10,000 face value of each share of preferred stock.

On or about December 11, 2020, 600 of the 630 Series C Shares sold to Discover in June, 2020 were returned by Discover for cancelation in exchange for a $6 million Promissory Note, leaving 30 Series C Shares outstanding from the June, 2020 transaction.

On or about May 17, 2022, Discover converted these 30 Series C Shares into 3,848,449 shares of common stock (equivalent to approximately 76,969 common shares on a post-reverse stock split basis) pursuant to the terms and conditions of the Certificate of Designation(s), as amended, associated with the Series C Preferred Stock.

As of December 31, 2022, Discover held zero shares of Series C Preferred Stock, and Discover is not entitled to any common shares in connection with prior conversions.

January, 2021:

On or about January 8, 2021, the Company entered into a Stock Purchase Agreement with EMC pursuant to which the Company agreed to issue 1,890 shares of Camber’s Series C Preferred Stock to EMC Capital Partners, LLC (“EMC”).

EMC converted 226 shares of Series C Preferred Stock Shares in tranches:

(i) 38 shares on September 14, 2021;

(ii) 59 shares on October 7, 2021;

and (iii) 129 shares on January 3, 2022 (at which time EMC no longer held any shares of Series C Preferred Stock).

The aggregate number of common shares issued to EMC in connection with its conversion of the 226 shares of Series C Preferred Stock equaled 154,186,428 (equivalent to approximately 3,083,729 common shares on a post-reverse stock split basis) pursuant to the terms and conditions of the Certificate of Designation(s), as amended, associated with the Series C Preferred Stock.

In January, 2022 the Company redeemed and cancelled 1,664 of EMC’s shares of Series C Preferred Stock.

As of December 31, 2022, EMC held zero shares of Series C Preferred Stock, but is entitled to 730,241 common shares in connection with prior conversions.

The Company anticipates issuing these common shares to EMC if the Company’s shareholders approve an increase in the Company’s authorized capital.

Effective as of July 9, 2021, the Company and Antilles Family Office, LLC (“ Antilles ”), an affiliate of Discover, entered into a Stock Purchase Agreement (the “ July 2021 Purchase Agreement ”), pursuant to which Antilles purchased 1,575 shares of Series C Preferred Stock for $15 million, at a 5% original issue discount to the $10,000 face value of each share of preferred stock.

Between May 17 and December 31, 2022, Antilles converted 1,305 shares of Series C Preferred Stock into 393,305,736 shares of common stock (equivalent to approximately 7,866,115 common shares on a post-reverse stock split basis) pursuant to the terms and conditions of the Certificate of Designation(s), as amended, associated with the Series C Preferred Stock.

Pursuant to the July 2021 Purchase Agreement, as long as Antilles holds any shares of Series C Preferred Stock, we agreed that, except as contemplated in connection with the Merger, we would not issue or enter into or amend an agreement pursuant to which we may issue any shares of common stock, other than (a) for restricted securities with no registration rights, (b) in connection with a strategic acquisition, (c) in an underwritten public offering, or (d) at a fixed price.

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We agreed to include proposals relating to the approval of the July 2021 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the July 2021 Purchase Agreement, as well as an increase in authorized common stock to fulfill our obligations to issue such shares, at the Company’s next Annual Meeting, the meeting held to approve the Merger or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to January 1, 2022.

Exchan g e Agreement, Promissory Notes and Security Agreements with the Investor

On December 11, 2020, the Company entered into an Exchange Agreement (the “ Exchan g e Agreement ”) with Discover, the sole shareholder of the Company’s Series C Preferred Stock at that time.

The transactions contemplated by the Exchange Agreement closed on December 11, 2020.

Pursuant to the Exchange Agreement, as an accommodation to the Company, and in order to reduce the potential dilutive impact of the Series C Preferred Stock, by reducing the number of outstanding shares of Series C Preferred Stock, Discover exchanged 600 shares of Series C Preferred Stock (the “ Exchan g ed Shares ”), with an aggregate face value of $6,000,000 (600 shares each with a face value of $10,000 per share), for a $6,000,000 secured Promissory Note (the “ December 11 th Investor Note ”), and the 600 Preferred Shares were cancelled.

Pursuant to the Exchange Agreement (a) Discover waived all prior breaches and defaults that occurred prior to the date of the Exchange Agreement or that may continue or occur for 90 days thereafter, under any agreements entered into with Discover relating to the acquisition of shares of Series C Preferred Stock (the “ 90 Day Period ”), and waived all rights and remedies with respect to any such breaches and defaults;

(b) we agreed to timely file all reports required by the SEC for so long as Discover holds any Series C Preferred Stock (provided the Company was provided until December 31, 2020, to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020);

(c) we agreed to indemnify and hold Discover, its affiliates, managers and advisors, and their related parties, harmless from any losses related to any breach of the Exchange Agreement (or other transaction documents), and from any action by the Company or a creditor or stockholder of the Company, challenging the transactions contemplated by the Exchange Agreement and related agreements, except to the extent finally adjudicated to be caused solely by such indemnified party’s unexcused material breach of an express provision of the Exchange Agreement or related agreements;

(d) we agreed to reserve from our outstanding common stock, shares of common stock to allow for the conversion of the outstanding Series C Preferred Stock (subject to the 90 Day Period);

(e) Discover agreed to vote all shares of common stock which it holds as of the record date for any shareholder meeting in favor of the Company’s previously announced pending plan of merger with Viking (the “ Merger ”), and the other proposals that are recommended for approval by the Board of Directors of the Company in the proxy statement filed in connection with such Merger;

(f) Discover agreed to the Merger and agreed to waive any rights it may have (including favored nations, anti-dilution and/or reset rights) in connection therewith;

(g) we acknowledged that Discover had previously provided notice to the Company of its intent to increase the beneficial ownership limitation set forth in the designation of the Series C Preferred Stock to 9.99%, and that such limitation will continue to apply moving forward;

and (h) we provided Discover and its related parties a general release.

The Exchange Agreement also amended the June 22, 2020 Stock Purchase Agreement previously entered into with Discover, pursuant to which Discover purchased 630 shares of Series C Preferred Stock, to remove from such June 22, 2020 agreement (i) the prohibition on Discover transferring and/or selling shares of Series C Preferred Stock;

and (ii) the repurchase obligation, which required the Company to redeem for cash, at 110% of the face value thereof ($10,000 per share), all 630 shares of Series C Preferred Stock sold by the Company in June 2020, in the event the Merger did not close by the required date set forth in the plan of merger relating thereto (as amended from time to time), and all similar provisions in any prior agreements entered into between the Company and Discover.

The December 11 th Investor Note (which had no conversion features upon issuance, but is now convertible as described below) had a balance of $6,000,000 and accrues interest at the rate of 10% per annum, which increases to the highest non-usurious rate of interest allowed under applicable law upon the occurrence of an event of default, which interest is due on the maturity date, which maturity date was the earlier of (a) December 11, 2022 (which may be extended with the mutual consent of the parties and a written amendment to the December 11 th Investor Note signed by Discover);

(b) March 11, 2021, in the event the Merger does not close or is not fully consummated by such date;

and (c) the date a change of control of the Company occurs, which includes any person becoming the beneficial owner of more than 50% of the combined voting power of the Company (a “ Change in Ownership ”), or the approval of (1) a plan of complete liquidation, (2) an agreement for the sale or disposition of all or substantially all the Company’s assets, or (3) a merger (other than a merger for purposes of redomiciling the Company), consolidation, or reorganization of the Company, which would result in a Change in Ownership, provided that the closing of the Merger will not trigger a change of control (or Change in Ownership).

The December 11 th Investor Note includes customary events of default.

Upon the occurrence of an event of default, Discover has the right to accelerate the full amount of the December 11 th Investor Note and all interest thereon, to enforce its rights under the December 11 th Security Agreement (defined below), and take other actions allowed under applicable law.

On or about December 23, 2020, the Company and Discover executed a First Amendment to 10% Secured Promissory Note (the “ Note Amendment ”) to modify item (b) above as it relates to the potential acceleration of the maturity date of the December 11 th Investor Note.

Specifically, the Note Amendment provided that the December 11 th Investor Note shall automatically accelerate, and all amounts of unpaid principal and interest shall become due immediately in the event that the Merger does not close or is not fully consummated by March 11, 2021;

however, such provision shall not apply if on or before such date the Company has increased its authorized capital to at least 250,000,000 common shares (which did occur on February 25, 2021).

Payment of the December 11 th Investor Note and performance of the Company’s obligations thereunder is required to be guaranteed by all subsidiaries or entities controlled or owned by the Company, or which may be owned after the date of the December 11 th Investor Note, provided that no guarantees have been entered into to date.

The December 11 th Investor Note may be assigned by Discover subject to compliance with applicable securities laws.

The Company may prepay the December 11 th Investor Note at any time.

The payment of amounts due under the December 11 th Investor Note is secured by the terms of a Security Agreement entered into by the Company in favor of Discover, which provides Discover a first priority security interest in substantially all of our assets (the “ December 11 th Security Agreement ”).

If an event of default occurs under the December 11 th Investor Note, Discover can enforce its rights under the December 11 th Security Agreement and foreclose on our assets in order to satisfy amounts owed thereunder.

As described above, in connection with the Viking Investment, on December 23, 2020, the Company (i) borrowed an additional $12,000,000 from Discover;

(ii) issued Discover a promissory note in the principal amount of $12,000,000 (“the December 23 rd Investor Note ”), accruing interest at the rate of 10% per annum and maturing December 11, 2022;

(iii) granted Discover a first-priority security interest in the Initial Viking Shares and the Company’s other assets (the “ December 23 rd Pledge Agreement”), and a general security agreement (the December 23 rd Security Agreement), respectively;

and (iv) entered into an amendment to the December 11 th Investor Note, amending the acceleration provision of the note to provide that the note repayment obligations would not accelerate if Camber had increased its authorized capital stock by March 11, 2021, which requirement was satisfied.

On April 23, 2021, the Company (i) borrowed an additional $2,500,000 from Discover;

(ii) issued Discover a promissory note in the principal amount of $2,500,000 (the “ April 23 rd Investor Note ”), accruing interest at the rate of 10% per annum and maturing December 11, 2022;

(iii) to secure payment of the April 23rd Investor Note, the December 23 rd Investor Note, and the December 11 th Investor Note (such notes together the “ Investor Notes ”), granted Discover a first-priority security interest in Camber’s shares of Viking and Camber’s other assets pursuant to a Security Agreement-Pledge (the “ April 23 rd Pledge Agreement ”) and a general security agreement (the “ April 23 rd Security Agreement ”).

Discover originally had the right to convert amounts owing under the April 23 rd Investor Note into shares of common stock of Camber at a fixed price of $1.00 per share (later amended to $1.25 per share as described below), subject to 9.99% beneficial ownership limitations.

The December 11 th Investor Note, the December 23 rd Investor Note and the April 23 rd Investor Note are referred to herein collectively as, the “ Discover Notes ”)

Effective July 9, 2021, Camber and Discover executed amendments to each of Discover Notes, pursuant to which (i) the Maturity Date of each of Discover Notes was extended from December 11, 2022, to January 1, 2024;

and (ii) Discover is permitted to convert amounts owing under each of Discover Notes into shares of common stock of Camber at a fixed price of $1.25 per share, subject to 9.99% beneficial ownership limitations.

On or about December 9, 2021, the Company received $1,000,000 from Discover and in connection therewith executed and delivered the following in favor of Discover:

(i) a promissory note dated on or about December 8, 2021 in the principal amount of $1,052,631.58, representing a 5% original issue discount, accruing interest at the rate of 10% per annum and maturing March 8, 2022;

(ii) a Security Agreement-Pledge granting Discover a first-priority security interest in Camber’s common shares of Viking;

and (iii) a general security agreement granting Discover a first-priority security interest in Camber’s other assets.

Discover may convert amounts owing under the promissory note into shares of common stock of Camber at a fixed price of $1.25 per share, subject to beneficial ownership limitations.

This promissory note was paid in full by the Company on January 4, 2022.

Effective December 24 2021, the Company executed amendments to the Discover Notes, pursuant to which:

(i) the Maturity Date of each Promissory Note was extended from January 1, 2024 to January 1, 2027;

(ii) the conversion price was increased from $1.25 to $1.50 per share of common stock;

and (iii) the interest rate was decreased from 10% per annum to the WSJ Prime Rate.

Other Agreements:

On or about December 24, 2021, the Company entered into two agreements (collectively, the “ December 24 th Agreements ”) as follows:

one agreement (the “ First Agreement ”) was entered into with an investor (the “ First Investor ”) that holds shares of Series C Preferred Stock of the Company (the “ Preferred Shares ”), and the second agreement (the “ Second Agreement ”) was entered into with another investor (the “ Second Investor ”, together with the First Investor, the “ Investors ”) that holds Preferred Shares along with four promissory notes, with an aggregate principal amount totaling $21,552,631.58, previously executed by the Company in favor of the Second Investor (collectively, the “ Notes ”).

The December 24 th Agreements are identical as to their terms.

The original securities purchase agreements between the Company and the Investors regarding the purchase and sale of the Preferred Shares (the “ SPAs ”) require the Company to, among other things, timely file all reports required to be filed by Company pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange A ct”), and to maintain sufficient reserves from its duly authorized Common Stock for issuance of all Conversion Shares (as such term is defined in the Certificate of Designation regarding the Preferred Shares (the “ COD ”), or the shares of Company common stock to be issued upon conversion of the Preferred Shares).

On October 6, 2021, the Company received notice from the Investors that they believed the Company breached the SPAs by failing to comply with those two requirements in the SPAs, and the Notes also contain a provision stating a breach by the Company of any terms within the SPA or COD is also a breach under the Notes, which would result in an immediate acceleration of the Notes at the holder’s option.

On October 9, 2021 the Company entered into amending agreements (the “ October Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on October 13, 2021), pursuant to which the Investors agreed to refrain from declaring defaults or bringing a breach of contract action under the SPAs, and the Second Investor agreed to refrain from declaring defaults or bringing a breach of contract action under the Notes, provided the Company:

(i) within 30 days of the date of the October Agreements, amended the COD to provide that holders of the Preferred Shares will vote together with holders of common stock on all matters other than election of directors and shareholder proposals (including proposals initiated by any holders of Preferred Shares), on an as-if converted basis, subject to the beneficial ownership limitation in the COD, even if there are insufficient shares of authorized common stock to fully convert the Preferred Shares (the “ COD Amendment Requirement ”); (ii) files by November 19, 2021 all reports required to be filed by the Company pursuant to the Exchange Act (the “ Filing Requirement ”); and (iii) implements and maintains, as soon as possible but no later than December 31, 2021, a sufficient reserve from its duly authorized Common Stock for issuance of all Conversion Shares (the “ Reserve Requirement ”).

The Company complied with the COD Amendment Requirement on November 8, 2021.

On November 18, 2021 the Company entered into amending agreements (the “ November Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on November 19, 2021).

Pursuant to the November Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the Investors agreed to extend the deadline for the Filing Requirement to December 6, 2021.

The deadline for the Reserve Requirement remained December 31, 2021.

On December 3, 2021 the Company entered into amending agreements (the “ December Agreements ”) with each of the First Investor and Second Investor (as disclosed by the Company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on December 6, 2021).

Pursuant to the December Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the Investors agreed to extend the deadline for the Filing Requirement to December 17, 2021.

The deadline for the Reserve Requirement remained December 31, 2021.

Pursuant to the December 24 th Agreements, as a further accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American, the parties agreed:

the deadline for the Filing Requirement is extended to January 14, 2022;

the deadline for the Reserve Requirement remains December 31, 2021, meaning the Company is required to obtain on or before such date, approval of the proposals outlined in the preliminary proxy statement filed by the Company with the Securities and Exchange Commission on November 9, 2021 (to increase the Company’s authorized common stock);

each and every Measurement Period (as defined in the COD) with regard to any share of Preferred converted by Investor or any affiliate of Investor prior to December 24, 2021 will terminate, and the provisions of Section I.G.1.d of the COD shall no longer apply with respect to any shares of Preferred converted prior to December 24, 2021;

If the Reserve Requirement and the Filing Requirement are not met by the deadlines mentioned above, Company acknowledges and agrees that (A) Company will be in uncured material breach and default under all of the Notes and Agreements, and (B) all Measurement Periods will remain open and continue to run in accordance with the terms of the COD.

The Company satisfied the Reserve Requirement by the required deadline but did not satisfy the Filing Requirement.

As at December 31, 2022, Antilles held 270 shares of Series C Preferred Stock.

The Company estimated these shares would convert into approximately 3.8 million common shares pursuant to the conversion formula set out in the Certificate of Designation(s), as amended, associated with the Series C Preferred Stock, using approximately $2.185 as the then low volume weighted average price (“Low VWAP”) of the Company’s common stock for the purposes of calculating the Conversion Premium due upon conversion.

The Low VWAP fell to approximately $1.2813 in March, 2023, which increased the underlying common share estimate from 3.8 million to 6.69 million common shares.

If the Low VWAP during the Measurement Period (as defined in the Certificate of Designation, as amended) falls below $1.2813, Antilles would be entitled to more than 6.69 million common shares.

Exchange Agreement, Promissory Notes and Security Agreements :

Exchange Agreement

On December 11, 2020, the Company entered into an Exchange Agreement (the “ Exchan g e Agreement ”) with Discover pursuant to which Discover exchanged 600 shares of Series C Preferred Stock, with an aggregate face value of $6,000,000 (600 shares each with a face value of $10,000 per share), for a $6,000,000 secured Promissory Note, and the 600 Preferred Shares were cancelled.

Summary of Promissory Notes

Between December 11 th , 2020 and December 24, 2021, the Company executed and delivered the following Secured Promissory Notes in favor of Discover:

Promissory Note dated December 11, 2020 in the original amount of $6,000,000 (the “ December 11 th Investor Note ”), which was issued in connection with the Exchange Agreement described above;

Promissory Note dated December 22, 2020 in the original amount of $12,000,000 (the “ December 22 nd Investor Note ”);

Promissory Note dated April 23, 2021 in the original amount of $2,500,000 (the “ April 23 rd Investor Note ”);

Promissory Note dated December 9, 2021 in the original amount of $1,000,000 (the “ December 9, 2021 Investor Note ”);

Promissory Note dated December 24, 2021 with a face value of $26,315,789 (the “ December 24, 2021 Investor Note ”), in respect of which $25,000,000 was funded on January 3, 2022.

The December 9, 2021 Investor Note was paid in full on January 4, 2022.

All other Promissory Notes remain outstanding and have a maturity date of January 1, 2027 (collectively, the “ Outstanding Notes ”).

Commencing December 24, 2021, pursuant to Amendments signed on or about such date and the satisfaction of the condition stated therein which related to the Company increasing its authorized capital prior to December 31, 2021, each of the Outstanding Notes bear interest at a rate per annum equal to the Wall Street Journal Prime Rate on the amendment date, being 3.25%, with interest payable at maturity.

Prior to December 24, 2021, the interest rate on applicable Outstanding Notes was 10% per annum.

All Outstanding Notes are secured by a first-ranking security interest against all of the Company’s assets, including the shares of Viking owned by the Company.

Viking has also guaranteed the Company’s obligations under the Outstanding Notes.

Discover previously had the right to convert all or a portion of the amounts owing under the Outstanding Notes into shares of common stock of the Company at a fixed conversion price, but pursuant to an Agreement signed by Discover and the Company on or about November 3, 2022, Discover waived all of such conversion entitlements.

Further Particulars of Promissory Notes & Security Agreements

Further particulars regarding the various Promissory Notes and associated Security Agreements are set out below.

Prior to December 24, 2021, all applicable Outstanding Notes accrued interest at the rate of 10% per annum after which the interest rate was reduced to 3.25% per annum pursuant to applicable amending agreements signed on December 24, 2021 between the Company and Discover regarding each Outstanding Note;

however the interest rate increases to the highest non-usurious rate of interest allowed under applicable law upon the occurrence of an event of default, which interest is due on the maturity date, which maturity date is the earlier of (a) January 1, 2027;

and (b) the date a change of control of the Company occurs, which includes any person becoming the beneficial owner of more than 50% of the combined voting power of the Company (a “ Change in Ownership ”), or the approval of (1) a plan of complete liquidation, (2) an agreement for the sale or disposition of all or substantially all the Company’s assets, or (3) a merger (other than a merger for purposes of redomiciling the Company), consolidation, or reorganization of the Company, which would result in a Change in Ownership, provided that the closing of the Merger will not trigger a change of control (or Change in Ownership).

All Outstanding Notes includes customary events of default.

Upon the occurrence of an event of default, Discover has the right to accelerate the full amount of the Outstanding Notes and all interest thereon, to enforce its rights under the applicable Security Agreements (defined below), and take other actions allowed under applicable law.

Payment of the Outstanding Notes and performance of the Company’s obligations thereunder is required to be guaranteed by all subsidiaries or entities controlled or owned by the Company, or which may be owned after the date of the Outstanding Notes.

The Outstanding Notes may be assigned by Discover subject to compliance with applicable securities laws.

The Company may prepay the Outstanding Notes at any time.

The payment of amounts due under the December 11 th Investor Note is secured by the terms of the following agreements entered into by the Company in favor of Discover on December 11, 2020:

(i) a Security Agreement;

and (ii) a Security & Pledge Agreement.

The payment of amounts due under the December 22 nd Investor Note is secured by the terms of the following agreements entered into by the Company in favor of Discover on December 22, 2020:

(i) a Security Agreement;

and (ii) a Security & Pledge Agreement.

The payment of amounts due under the April 23 rd Investor Note is secured by the terms of the following agreements entered into by the Company in favor of Discover on April 23, 2021:

(i) a Security Agreement;

and (ii) a Security & Pledge Agreement.

The payment of amounts due under the December 24, 2021 Investor Note is secured by the terms of the following agreements entered into by the Company in favor of Discover on December 24, 2021:

(i) a Security Agreement;

and (ii) a Security & Pledge Agreement.

Each of the above-noted Security Agreements provides Discover a first priority security interest in substantially all of the Company’s assets, and if an event of default occurs under any of the Outstanding Notes Discover can enforce its rights under any or all of the Security Agreements and foreclose on our assets in order to satisfy amounts owed thereunder.

Pursuant to the above-noted Security & Pledge Agreements, the Company granted Discover a first-priority security interest in the shares of common stock of Viking owned by the Company and the Company’s other assets.

Other Agreements with Discover and/or Antilles in 2022:

The Certificates of Designations with respect to the Company’s Series C Preferred Stock and Series G Preferred Stock (collectively, the “CODs”) and/or the Stock Purchase Agreements regarding the sale of such Series C Preferred Stock and Series G Preferred Stock (collectively, the “SPA’s”), contain covenants requiring the Company to timely file all reports required to be filed by the Company pursuant to the Exchange Act (the “Filing Requirement”).

Throughout 2021 and early 2022, the Company did not satisfy the Filing Requirement and, consequently, on or about March 9, 2022, the preferred stock holders, Discover and Antilles, filed a Verified Complaint against the Company (the “Discover/Antilles Complaint”) as a result of the default by the Company under the CODs.

A default under the CODs and/or SPA’s is also considered an event of default under each of the Outstanding Notes, and upon an event of default under the Outstanding Notes, Discover may, at its option, declare the principal and any and all interest then accrued thereon, at once due and payable, and exercise any other rights under applicable agreements.

Discover did not exercise its right to declare the amount owing under the Outstanding Notes immediately due and payable, but Failure by Discover to exercise such right does not constitute a waiver of the right to exercise the same in the event of any subsequent default.

As of April 18, 2022, Discover, Antilles and the Company entered into a Settlement Agreement to settle the Discover/Antilles Complaint, and the Settlement Agreement was approved by the Court on or about May 12, 2022.

If the Company fails to satisfy future Filing Requirements, it would be considered a default under the CODs and SPA’s, which in turn would constitute an event of default under the Outstanding Notes.

October, 2022

On October 28, 2022, the Company entered into two agreements (collectively, the “ Agreements ”), one with Discover and the other with Antilles, in relation to an amendment to the fifth amended and restated certificate of designations regarding the Company’s Series C Preferred Stock (the “ COD ”) as an accommodation to the Company and in order to help facilitate implementation of the Company’s business plans and continued trading on the NYSE American LLC, and in exchange for the release and indemnity as provided in the Agreements.

On October 31, 2022, the Company filed with the Secretary of State of Nevada an amendment to the COD (the “ Amendment ), dated as of October 28, 2022 (the “ Amendment Date ”), pursuant to the Agreements, which amended the COD such that (i) beginning on the Amendment Date and thereafter, when determining the conversion rate for each share of Series C Preferred Stock based on the trading price of the Company’s common stock (“ Common Stock ”) over a certain number of previous days (“ Measurement Period ”), no day will be added to what would otherwise have been the end of any Measurement Period for the failure of the Equity Condition (as defined in the COD), even if the volume weighted average trading price (“ Measuring Metric ”) is not at least $1.50 and each Investor waived the right to receive any additional shares of Common Stock that might otherwise be due if such Equity Condition were to apply after the Agreement Date, including with respect to any pending Measurement Period;

and (ii) (A) beginning on the Amendment Date and for the period through December 30, 2022, the Measuring Metric will be the higher of the amount provided in Section I.G.7.1(ii) of the COD and $0.20, and (B) beginning at market close on December 30, 2022 and thereafter, the Measuring Metric will be the volume weighted average trading price of the Common Stock on any day of trading following the date of first issuance of the Series C Preferred Stock.

November, 2022

On November 3, 2022, the Company entered into an agreement (the “ Agreement ”) with Discover, pursuant to which Discover absolutely and unconditionally waived and released any and all rights to receive further or additional shares of the Company’s common stock (the “ Conversion Shares ”) with respect to any and all shares of Series C Preferred Stock previously converted by Discover including, but not limited to, the right to deliver additional notices for more Conversion Shares under the Fifth Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by the Company with the Secretary of State of Nevada on November 8, 2021, as amended on October 28, 2022.

Discover also absolutely and unconditionally waived and released any and all rights to convert all or any part of any Outstanding Notes previously executed by the Company in favor of Discover into shares of the Company’s common stock, and agreed not to convert or attempt to convert any portion of any Outstanding Notes, at any particular price or at all.

Series C Preferred Stock Corrections and Amendments

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On November 8, 2021, the Company filed with the Secretary of State of Nevada a Fifth Amended and Restated Designation regarding its Series C Preferred Stock which amended the Designations to provide voting rights to holders of the Series C Preferred Stock as required by the October 2021 Agreements (as defined herein).

On October 31, 2022, the Company filed with the Secretary of State of Nevada an amendment to the COD (the “ Amendment ), dated as of October 28, 2022 (the “ Amendment Date ”), pursuant to agreements between the Company and each of Discover and Antilles signed on October 28, 2022, which amended the COD such that (i) beginning on the Amendment Date and thereafter, when determining the conversion rate for each share of Series C Preferred Stock based on the trading price of the Company’s common stock (“ Common Stock ”) over a certain number of previous days (“ Measurement Period ”), no day will be added to what would otherwise have been the end of any Measurement Period for the failure of the Equity Condition (as defined in the COD), even if the volume weighted average trading price (“ Measuring Metric ”) is not at least $1.50 and each Investor waived the right to receive any additional shares of Common Stock that might otherwise be due if such Equity Condition were to apply after the Agreement Date, including with respect to any pending Measurement Period;

Amendments to Articles Regarding Common Shares

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On December 30, 2021, the Company filed an amendment to the Company’s articles of incorporation to effect a proposal approved at a Special Meeting of Stockholders on December 30, 2021 whereby the Company's stockholders approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 250,000,000 to 1,000,000,000.

Recent Reverse Stock Split and Amendments to Articles

On December 14, 2022, the Board of Directors approved a one-for-fifty (1-for-50) reverse stock split of the Company’s (a) authorized shares of common stock;

and (b) issued and outstanding shares of common stock (the “Reverse Stock Split”).

The Reverse Stock Split became effective at 12:01 a.m.

Central Standard Time on December 21, 2022, and was reflected with the NYSE American and in the marketplace at the open of business on December 21, 2022 (the “Effective Date”).

As a result of the Reverse Stock Split, each of the holders of the Company’s Common Stock received one (1) new share of Common Stock for every fifty (50) shares such shareholder held immediately prior.

No fractional shares were issued as a result of the Reverse Stock Split.

Any fractional shares that would have otherwise resulted from the Reverse Stock Split will be rounded up to the next whole number of shares.

The Reverse Stock Split decreased the number of authorized shares of common stock from 1,000,000,000 to 20,000,000.

The Reverse Stock Split also affected the Company’s outstanding stock options, warrants and other exercisable or convertible instruments and resulted in the shares underlying such instruments being reduced and the exercise price being increased proportionately to the Reverse Stock Split ratio.

All share and per share data have been retroactively restated in the accompanying consolidated financial statements and footnotes for all periods presented to reflect the effects of the Reverse Stock Split as if it had taken place as of the beginning of the earliest period presented.

Industry Segments

For the year ended December 31, 2021 and the nine months ended December 31, 2020, our operations were all crude oil and natural gas exploration and production.

We are in direct competition for properties with numerous oil and natural gas companies and partnerships exploring various areas of Louisiana, Texas, and elsewhere.

Many competitors are large, well-known oil and natural gas and/or energy companies, although no single entity dominates the industry.

Many of our competitors possess greater financial and personnel resources, enabling them to identify and acquire more economically desirable energy producing properties and drilling prospects than us.

Additionally, there is competition from other fuel choices to supply the energy needs of consumers and industry.

For the years ended December 31, 2022 and 2021, our operations were all crude oil and natural gas exploration and production.

Our operations are subject to various types of regulation at the federal, state and local levels.

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Management views this as a necessary requirement for operations and does not believe that these costs will have a material adverse effect on our financial position as a result of this requirement.

The Company now has 9 fulltime employees, all working at the Company’s office in Houston, Texas.

Outside of the Houston operation, the Company continues to retain outside consultants as needed, involved in business development, business analysis, financial consulting, web programming and designing, execution and support of the Company’s business.

The Company does not have any fulltime employees, but continues to retain outside consultants as needed, involved in business development, business analysis, financial consulting, web programming and designing, execution and support of the Company’s business.

Reports to Securities Holders

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business